In part 6 of our blog series on OMC’s we covered the fact that the new Companies Act 2014, which came into force from 1 June 2015 will affect OMC’s. We noted in our last blog the main changes for Companies Limited by Guarantee not having a share capital. In this blog we will cover OMC’s that have a share capital.
Designated Activity Companies
Under the new Act OMC’s that are Companies limited by guarantee and have a share capital or OMC’s that are share capital only are not deemed guarantee companies. Instead they are now considered to be Designated Activity Companies limited by guarantee or DAC’s, governed by Part 16 of the Act.
The laws of the DAC
From 1st June 2015 until the end of the transition period or until converted to Limited Status
the laws of the DAC will apply to these companies. These would include:
1. Conversion process necessary to convert back to Limited (LTD) company, which are deemed more flexible than DAC’s,
2. Will have a constitution consisting of a Memorandum of Association and Articles of Association,
3. An objects clause will continue to be included in its constitution,
4. Will be required to change its name to include the term “Designated Activity Company”,
5. Required to have at least 2 directors and will be required to hold an AGM.
Directors of OMC’s should ensure that their company complies with the requirements of the new Companies Act and obtain professional advice where required on issues noted above.
In our next blog we will talk about limited (LTD) companies.
What questions do you have?
We are happy to help. Please post your comment below or contact our Audit Service Director Will Townsend
) on 01 677 9000.
To keep in touch, connect with us on LinkedIn.
If this article helped you, please share it with other businesses.